Derr's salary in 2009 will be $38,125, an $8,760 decrease from the amount budgeted for an acting chief.

Council members John Conrad and Pat Brunner voted no to the measure.

Derr could not be reached for comment.

Mayor Kraig Nace said while he understands the budget constraint, he feels the money could have been taken out of the budget's utility revenues, most of which goes toward capital repair projects.

"Council has spent an unbudgeted $15,000 on legal fees," Nace said, adding that the legal fees are what is responsible for the lack of police funding at the end of 2008 (see related story). "All that money was taken out police department funds.'

Nace said Derr is "angry and disappointed' over the demotion.

"For the last year, certain councilmen, like Mr. (Michael) Fedor, have commented on how the department needs better management and more oversight, and rather than fix that and work with the chief, they've removed that component altogether.'

Fedor asked council what the borough wouldn't receive from a sergeant that it would receive from an acting chief.

Derr "is not performing administrative duties. Let's be realistic about what we're paying for," Fedor said. "What are we getting from it that we won't get from a sergeant's position? I personally believe the chief shouldn't be doing patrol work.'

Brunner disagreed, saying the borough couldn't afford a chief who performed only administrative duties.

"Even if we raise taxes, crime won't go down. If we don't have a police department, it's going to affect the citizens," Brunner said.

Derr, an officer with the borough since 1995, has been on vacation and bereavement leave since the end of last month. He is scheduled to return after Jan. 1.

Council president Duane Hammaker noted the lack of manpower currently in the borough. "It's an issue of how you schedule a vacation. A whole month can become critical," Hammaker told Nace.

The borough currently is served by patrolman John Bruno Jr. and Pennsylvania State Police. Bruno also took a week's vacation earlier this month.

Also discussed was the possibility of laying off or furloughing one of the officers. Hammaker asked if one officer would be enough for the borough.

Fedor said he wanted to save costs, but wanted to maintain coverage and was against furloughing or laying off an officer.

"I have a lot of heartburn about it. I don't want to do this lightly ... we have a two-person department that is all of our property tax money. We're going to impact one of two people if we make cuts there.'

The demotion marks the end of a tense year between council and the borough police department. In March, council reached a compromise with the department over two AR-15 rifles, selling one. The rifles were purchased in 2006, and Nace authorized the purchase, which council said it didn't know about.

In July, council fired part-time officer Eric Beyer after he posted comments on an Internet message board, critical of the rifle decision.

Beyer has since filed a suit over the matter with the state Labor Relations Board.

Next year, Nace said, he would like to see council doing more research before making "rash' decisions and seek more input from the department.

"By not soliciting input, you're so out of touch as to what's appropriate for taxpayer money. It's disgusting.'